Why some founders are flying blind (& how to fix)
I chewed over this conversation.
A lovely founder running a genuinely successful business, £2m revenue, profitable, growing - admitted over coffee that they had absolutely no idea whether last month was actually profitable.
Revenue looked good. The team was busy. Product looked lovely. Customers were happy.
But profitable? They genuinely didn't know.
And before you judge, this isn't someone who's bad at business. They're brilliant at what they do. Built something from nothing.
They just never learned how to read their own numbers. Declared themselves ‘not a numbers person’, and then carried that identity.
The (Icky) Truth
42% of small business owners admit they had limited or no financial literacy before starting their businesses (source: Clockify). And they're running companies.
13% believe they've missed out on £500,000 or more.
Half a million pounds. Gone. Not because of bad luck or market conditions, but because they didn't understand their own numbers well enough to make good decisions.
Why This Happens
Most founders fall into one of three categories.
You're an expert in your field who started freelancing, and it accidentally became a business. Now you're supposed to understand cash flow forecasting and gross margin analysis on top of everything else you do.
Or you spotted an opportunity and went for it. Built something brilliant, figured out how to deliver great work and keep clients happy. But nobody taught you the finance bit.
Or maybe you left your corporate job to do your own thing. You know how to do the work, you might even know how to manage a P&L for someone else's business, but managing your own finances feels completely different.
The accidental founder. The opportunistic founder. The corporate refugee.
None of these people wake up thinking 'I can't wait to learn about accrual accounting today.'
The Cost of Flying Blind
When you don't understand your numbers, you make decisions on gut feel instead of data.
You might think you're profitable when you're actually losing money on certain projects. You might delay hiring when you could easily afford it. You might raise funding when you don't actually need it. One founder was convinced they needed to hire a full-time finance person. When we looked at their actual infrastructure, they needed better systems, not more payroll. We saved them about £45k a year.
The financial hit is real. But the worst part is the constant low-level anxiety of not really knowing if you're okay. The nagging worry that you're missing something important. The feeling of being slightly out of control of your own business.
That's exhausting.
What Financial Clarity Actually Looks Like
Good news: you don't need to become a finance expert.
You don't need to love spreadsheets, you don't need to understand the finer points of FRS 102, and you definitely don't need an MBA.
You just need to understand your own numbers well enough to make informed decisions.
Financial clarity means you can answer basic questions without panicking:
Can I afford to hire someone next month?
Which parts of my business are actually profitable?
When do I need to think about my next funding conversation?
Am I pricing my work correctly?
Do I have a cash flow problem coming, or am I fine?
That's it. Not 'can you prepare management accounts from scratch' or 'do you understand deferred tax liabilities.'
Just 'do you know what's actually happening in your business.'
How To Get There
Start with the three reports that actually matter
Cash flow forecast. Management accounts. Aged debtors.
These three reports tell you everything you need to know to run your business. Learn how to read these, and you're 80% of the way there.
Ask the stupid questions
There are no stupid questions in finance, just jargon that makes simple concepts sound complicated.
I spent five years at PwC where everything sounded impossibly complicated. Then I spent the next 14 years within businesses learning to translate that back into English. The concepts aren't actually that hard, the language just makes them sound that way. I think they do it on purpose.
If your accountant or bookkeeper makes you feel stupid for asking, find a new one.
Stop trying to DIY everything
Trying to muddle through finance when you don't really understand it is like trying to fix your own boiler when you're not a plumber. You might save money in the short term. But you might also make it worse.
Get systems that make sense to you
If your financial reports need the enigma machine and three coffees to understand, they're not fit for purpose. Your reports should be clear enough that you can look at them for 15 minutes on a Wednesday morning and know what's happening.
If they're not, the problem isn't you. The problem is the reports.
The Takeaway
That founder I mentioned at the start? The one who didn't know if last month was profitable?
We spent 90 minutes building them a simple dashboard. Now they check it every Monday morning and they know exactly where they stand.
They still don't love finance. They're still not a 'numbers person.'
But they're not flying blind anymore.
